Birmingham remains close to the bottom of a local authority performance league table after Audit Commission inspectors found the City Council was performing only at "minimum requirements".
Britain's biggest local authority retained its two-star ranking in the commission's latest annual Comprehensive Performance Assessment, but was marked down on prospects for future improvement.
In the 2005 CPA, Birmingham was judged to be improving well. The 2006 CPA, published today, says that the council is improving only adequately – the second to bottom ranking in the direction of travel category.
An overwhelming majority of English local authorities – 79 per cent – were awarded three or four stars, denoting strong performance.
Birmingham is one of 21 per cent of councils anchored firmly in the one and two star zone, denoting inadequate or minimum performance.
In the West Midlands, Coventry, Dudley, Solihull, Wolverhampton and Walsall have three stars.
Rival cities Manchester, Leeds and Newcastle have three stars, while Sheffield has four.
The CPA report on Birmingham paid tribute to progress in some key areas, including services for children and housing, but concluded that improvement was not consistent and there was no clarity about how longer term aims would be delivered.
Council leader Mike Whitby, who heads the city's Conservative-Liberal Democrat coalition, insisted that Birmingham was "on the cusp" of progressing to three-star status, which would denote performing consistently above minimum requirements.
Coun Whitby (Con Harborne) said he was cautiously optimistic that the third star would be gained next year, although he conceded that much would depend on improving adult social services.
Under Audit Commission rules, no council can progress to three stars if its social services department retains a two star ranking. Birmingham social services remains on two stars largely because the council has only just begun a programme to replace unsuitable old people's homes with
modern sheltered care, Coun Whitby said.
The council leader said the commission's findings had to be seen in the context of Birmingham's poor performance up until 2005, when social services and housing were so poor that the city had no stars at all.
Coun Whitby added: "We are still addressing deep-seated challenges, which is why we have put #133 million into social care. The Audit Commission is confident that we can improve.
"We were a weak and under-performing authority for three consecutive years. We have moved to not only minimum standards but we are improving quickly.
"We have the desire and determination to deliver excellent services. We have the funding, the policies, a motivated workforce and we are determined to drive it forward."
Labour group deputy leader Ian ward said the CPA report exposed the council's "dead end leadership". Coun Ward (Lab Shard End) added: "When the Conservative-Liberal Democrat coalition was formed in 2004, it was able to ride on the wave of improvements Labour had
put in place. That got them stars in social services and housing.
"The CPA demonstrates that the coalition is not taking this city forward. In fact, we are beginning to go backwards. It will take some visionary leadership to get Birmingham out of this predicament, but it is not going to come from the council's present leadership."
Council chief executive Stephen Hughes warned against underestimating the resistance of the Audit Commission to promoting previously failing local authorities. Inspectors had to be convinced that improvement in services could be maintained before awarding an extra star.
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